Putting Britain back to work

But if anything can be said with certainty about the changes – which saw the new benefits cap of £500-a-week come into force across the country yesterday – it is that they are popular with the public.

Poll after poll shows support for the reforms and general exasperation at the way in which the benefits bill had been allowed to mushroom out of control, creating perverse incentives which rewarded people for staying at home rather than accepting low-paid work, which made it more lucrative for parents to live separately and which paid single women to have more and more children.

And while Labour gleefully applauds any glitch that threatens to delay the introduction of the new Universal Credit system, the Opposition’s own proposals for rescuing people from Britain’s welfare trap are noticeably thin on the ground.

As Iain Duncan Smith pushes ahead with his reforms, however, and the Treasury makes plans for ever greater welfare cuts as a means of plugging the public-sector deficit, the Work and Pensions Secretary needs to assess carefully how the changes are working and be prepared to make alterations wherever they are needed.

So ground-breaking are the reforms, after all, that it is impossible to imagine that they will not throw up problems of their own and these must be identified and corrected as soon as possible.

Already, for instance, there are signs of anomalies in the new system which may still encourage parents to live apart, considering that the new limit is £500-a-week for couples but £350-a-week for single people.

This is an indication of why the changes need to be kept under constant review. A group of Tory MPs representing marginal constituencies, for example, advocates still tougher measures to deter teenage single mothers, with benefits contingent on their living with parents or in supervised hostels.

Until it is clear how effective the new reforms are, ideas such as this need to be kept in reserve. For so perverse and counter-productive has the benefits system been that no one should yet conclude that its corrosive effects on British society are all over.

All change?

BY COMMON consent, the Labour Party’s economic policy since the 2010 General Election has been a damp squib.

For the past three years, Ed Miliband and Ed Balls have been insisting that the Government was cutting too far, too fast and that triple-dip recession would be the inevitable result.

Yet now, with signs of life returning to the economy, Labour has had to admit that, if it won office, it would have to adopt the coalition’s spending plans. As a result, Mr Miliband can no longer claim that austerity is the problem and that borrowing is the solution, leaving the Labour leader without a plan for stimulating growth.

It is possible, however, that the Conservatives have unwittingly provided Mr Miliband with a lifeline.

Lord Adonis, the man charged with charting a new Labour growth strategy, makes it clear in his interview with this newspaper that, by failing to implement Lord Heseltine’s plan for devolving spending power from Whitehall to the regions, the Government has left Labour an opportunity.

Indeed, it is even possible that Labour could take the Heseltine plan and improve upon it by looking to empower councils rather than local enterprise partnerships and by emphasising the importance of infrastructure development, dovetailing well with the party’s commitment to high-speed rail.

For far too long, Labour has been wedded to a centralising agenda that has seen the regions treated as little more than outposts of Whitehall. If the party is sincere in turning its back on this, we await the outcome of Lord Adonis’s growth review with interest.

In the shadows

BRITAIN’S opaque system of business regulation was exposed by the banking crisis as being in severe need of reform.

Five years later and Vince Cable is finally planning to reshape the rules on corporate governance in a way that will shine a light on shadowy companies, forcing them to declare their owners and making directors more accountable for their firms’ failures.

Reforms that would bring greater trust and transparency to British companies and their transactions have long been necessary.

The devil, however, will be in the Business Secretary’s detail. How, for instance, will Mr Cable ensure that the new rules deter and punish the irresponsible, but do not lay extra burdens on those companies which already play by the rules?

Ensuring that smaller companies, for example, are not left facing more costs and regulations when most already exhibit a high level of transparency in their corporate structures, will be essential.

If he is really serious 
about these proposals, 
then, Mr Cable has some work to do, especially considering the fact that they have been so long in emerging that he must now hurry if he is to get them on the statute book before the General Election.